On Wednesday, the silicone market continued its upward trend, but the overall pattern remained weak. Among them, the mainstream quotation of DMC remains stable at 12300-12800 yuan/ton, while the price of 107 glue is stable with a slight decrease, and the transaction price is in the range of 13300-13500 yuan/ton; The price of raw rubber ranges from 13500 to 13700 yuan/ton, and pre-sale orders show a trend of differentiation; The price of silicone oil ranges from 14500 to 14700 yuan/ton, and the continuous impact of new production capacity on industry profits. Based on market trends, the short-term organic silicon market is expected to maintain a consolidation pattern, with limited room for price fluctuations, but the medium-term supply-demand contradiction is becoming increasingly prominent.
From the perspective of the operational characteristics of the industrial chain, the supply side shows a cautious trend. Upstream production enterprises generally adopt the strategy of "production based on sales", and the industry as a whole maintains low load operation. Although most individual factories rely on inventory advantages to maintain stable quotations, their willingness to take orders has significantly increased, reflecting the continuous increase in pressure for enterprises to reduce inventory. This strategy of "stabilizing prices and ensuring quantity" is actually a helpless move for enterprises during market downturns.
The cost side support is gradually weakening. The continuous fluctuation and downward trend of raw material silicon prices directly lowers the production costs of individual factories. Although the current DMC price is at a low level for the year, the downward shift of the cost line has reserved space for subsequent price adjustments, and the market's expectation of a price decline has increased.
The fatigue on the demand side is evident, becoming the main factor dragging down the market. Downstream industries generally adopt a low inventory strategy, with rigid demand dominating procurement behavior and a reduced willingness to stock up due to market bearish expectations. The slowdown in terminal demand growth coupled with the "ready to use" consumption model has led to a significant decrease in market trading activity in the past three days, further exacerbating the problem of insufficient market liquidity.
Currently, the organic silicon industry is facing three challenges: weakened cost support, sustained weak demand, and prominent overcapacity pressure, with a particularly prominent mid-term supply-demand contradiction. Against the backdrop of a lack of substantial positive factors driving the market, it is difficult to change the weak consolidation pattern in the short term, and downward pressure on prices is gradually accumulating. In the later stage, it is necessary to closely monitor the changes in upstream operating rates and the recovery of terminal demand, which will become key variables in breaking the market deadlock.
It is worth noting that industry difficulties have already emerged in individual enterprises. Recently, the People's Court of Yangzhong City, Jiangsu Province announced the acceptance of the compulsory liquidation case of DHX Silicone Co., Ltd. in Zhenjiang City. This enterprise, established in 2012, has a registered capital of 5 million yuan and its business scope covers the sales and import/export of products such as silicone rubber, silicone gel, and silicone oil. However, since 2017, the company has been repeatedly listed in the list of abnormal operations due to failure to submit annual reports as required and inability to contact its business premises. It has also been listed as a dishonest debtor and restricted high consumption enterprise. This bankruptcy liquidation is not only the result of the company's own poor management, but also reflects the severe situation facing the current organic silicon industry from a side perspective.